Every day, billions of dollars changes hands based on the myth that people actually read, and agree to, every word in every contract they’ve ever signed. Ever read your cell phone contract? Your cable contract? Judge Posner famously admitted that he didn’t read the contract that came with his home equity loan.

Truth is, who has the time or energy to scrutinize every line? And what power do you have to negotiate it? Try negotiating your cell phone contract some time. See if you can even find a person at the company with the authority to negotiate.

Decades ago, thoughtful jurists like federal Judge J. Skelly Wright and California Justice Mathew Tobriner analyzed the issue carefully in cases like Williams v. Walker-Thomas Furniture Co., 350 F. 2d 445, 449-450 (1965) and Steven v. Fidelity & Casualty Co. of New York, 58 Cal. 2d 862, 883, 377 P. 2d 284, 298 (1962) and came to sensible conclusions like Skelly Wright’s statement of the law of contracts of adhesion in Williams:

Ordinarily, one who signs an agreement without full knowledge of its terms might be held to assume the risk that he has entered a one-sided bargain. But when a party of little bargaining power, and hence little real choice, signs a commercially unreasonable contract with little or no knowledge of its terms, it is hardly likely that his consent, or even an objective manifestation of his consent, was ever given to all of the terms. In such a case the usual rule that the terms of the agreement are not to be questioned should be abandoned and the court should consider whether the terms of the contract are so unfair that enforcement should be withheld.

That was then, this is now. Now, when the United States Supreme Court thinks that might makes right, so much so that it routinely ignores constitutional limits on special interest legislation for copyright holders while vigorously enforcing the “free speech” rights of pharmaceutical companies to go fishing through your prescription medication records, it’s all just a question of how consumers, patients, employees, and family members will lose in front of the Supreme Court, not if they will. 
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In 1987 Congress passed the Nursing Home Reform Act, but the NHRA only said that a “nursing facility must provide services and activities to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident,” without providing specific numbers on the minimum staffing levels for registered nurses and nurse’s aides required per resident. The situation is a perfect storm for elderly abuse and neglect: more residents and fewer nursing assistants translates directly into profits for the owners of the facility, sending the whole industry into a ‘race to the bottom.’ The states have filled in the gap in some ways with regulations establishing the number of care managers that have to be assigned per resident, but standards are still quite low and, worse, they’re routinely violated.  Given how widespread nursing home horror stories are — virtually everyone knows a story, or two, or ten, about an elderly resident being left dehydrated for days or developing an infection that’s never treated — you would think all attention would be directed towards improving the quality of elder care.

Right now it seems the Pennsylvania legislature is focused on doing exactly the opposite by shielding nursing home companies from the same laws that apply to the rest of us (except doctors and hospitals, who received this same special protection under the MCARE Act in 2003). As Amaris Elliott-Engel at The Legal Intelligencer is reporting,

Last month, the House voted on the third consideration and final passage of House Bill 1907 103-89 to amend the Medical Care Availability and Reduction of Error (MCARE) Act to cap punitive damages in lawsuits against personal care homes, assisted living communities, long-term care nursing facilities, home care agencies, home health care agencies and hospices at 200 percent of the compensatory damages awarded in such lawsuits. The bill is still pending in the state Senate. The cap would not apply to cases involving intentional misconduct.

The primary sponsor of the legislation, Rep. Glen R. Grell, R-Cumberland, said that he advocated for the legislation because nursing homes in his district should not be “subject to the jackpot punitive damages awards that could result.”

Nursing home litigation is a common target for tort reform propaganda these days, and as far as I can tell Rep. Grell hasn’t come up with any examples of what he means by “jackpot punitive damages awards,” he just thinks it sounds nice. 
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Earlier this week, The Legal Intelligencer filed a report about the Pennsylvania Supreme Court’s hearing on the Scampone v. Highland Park Care Center case:

In the apparent headliner of last week’s Supreme Court oral arguments in Harrisburg — a case dealing with whether a nursing home can be held liable under the theory of corporate negligence — the attorneys representing the plaintiffs told the justices they simply wanted to hold it responsible.

It didn’t have to be “corporate negligence,” the lawyers told the justices.

The acknowledgment came after several on the high court bench asked Peter D. Giglione and Stephen Trzcinski, both representing the plaintiff in Scampone v. Highland Park Care Center, what was stopping them from suing nursing home Highland Park Care Center under ordinary negligence at common law. …

Giglione argued vicarious liability for the nursing home would not be sufficient because, in this case, it was the larger company making the decisions that led to the underlying problem.

The Pennsylvania Superior Court agreed with the Plaintiffs (that court’s opinion is available here).

It sounds like an argument that only lawyers could dream up: whether you can only sue a corporation for negligence or whether you can also for corporate negligence.  To understand why that question matters, and why the Pennsylvania Supreme Court should allow the survivors of nursing home abuse to sue managed care facilities for corporate negligence, we need to review some background. There’s more than enough misconceptions about nursing home litigation.

If John Roberts’ tenure as Chief Justice of the United States could be summed up in one sentence, it would be “corporations have all the same rights as real people, plus a couple more.”  The mere notion of corporate personhood is silly — a corporation exists to make money, and can be born, die, and merge with other corporations at will — but the law in most states treats corporations as if they were people. (Stephen Colbert rightfully wants to put “corporations are people” versus “only people are people” to a vote.)

That concept of the corporation as a single person can pose a problem when it comes time to hold companies accountable for the actions of many employees and affiliated corporations.  If the driver of the car speeds through a stop light and hits someone, it’s quite obvious where blame starts: the driver of the car.  It’s far more difficult to assign that sort of individual blame when, for example, multiple care managers at a residential care facility ignore a resident’s dehydration or infection.  Many nursing home companies deliberately try to evade responsibility for these types of systemic problems by operating their facilities through multiple shell companies, many of which are created for the sole purpose of frustrating residents’ families and lawyers in the course of a lawsuit.
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A Brief History of Nursing Home Litigation

Civil tort litigation tends to follow larger social trends. The post-World War II through 1970s construction boom involved more than a fair amount of asbestos and was followed a generation later by the mesothelioma lawsuit industry. The rapid growth in available health care treatments (and union-negotiated health insurance